In this case, thirty-one named plaintiffs have alleged a far-reaching price-fixing conspiracy by the four largest rail freight carriers in the United States: BNSF Railway Company, CSX Transportation, Inc., Norfolk Southern Railway Company, and Union Pacific Railroad Company, which together account for nearly 90 percent of rail freight traffic in the country. On June 21, 2012, the Court certified a class consisting of approximately 30, 000 shippers - a class that likely includes Oxbow Carbon & Minerals LLC and five of its affiliated companies (together, "Oxbow").[1] In re Rail Freight Fuel Surcharge Antitrust Litig., 287 F.R.D. 1, 10 (D.D.C. 2012). On August 9, 2013, the United States Court of Appeals for the District of Columbia Circuit vacated this Court's class certification decision and remanded the case to permit the Court to reconsider that decision in light of the Supreme Court's recent decision in Comcast Corp. v. Behrend , 133 S.Ct. 1426 (2013). In re Rail Freight Fuel Surcharge Antitrust Litig. - MDL No. 1869, ___ F.3d ___, 2013 WL 4038561, at *8 (D.C. Cir. 2013).

This matter is before the Court on Oxbow's motion to disqualify Latham & Watkins LLP ("Latham") as counsel for defendant Union Pacific Railroad Company ("UP") in this case, sometimes referred to herein as "the MDL". Oxbow requests that the Court disqualify Latham as counsel for UP on the ground that Latham's representation of UP in this case is tainted by a conflict of interest. After careful consideration of the parties' arguments presented in their briefs and at oral argument on July 9, 2013, the numerous declarations submitted by the parties, including declarations of eminent experts in legal ethics, and the relevant legal authorities, the Court concludes that Latham's representation of UP in this case does not present a disqualifying conflict of interest and will deny Oxbow's motion to disqualify counsel.[2]

I. BACKGROUND

Because the sequence of events is highly relevant to the Court's determination of whether the Rules of Professional Conduct have been breached, the following discussion presents the pertinent events chronologically.

In 1997, Latham began representing UP. Ballenger Decl. ¶ 2. Since that time, Latham has represented UP in at least thirty-two separate matters, including litigation and environmental matters. Id.

In January 2007, the Surface Transportation Board ("STB") concluded an investigation of the leading railroads' practice of imposing rate-based fuel surcharges on top of the base rates charged to customers for rail freight services. Rail Fuel Surcharges, Ex Parte No. 661 , 2007 WL 201205 (S.T.B. Jan. 25, 2007); see also In re Rail Freight Fuel Surcharge Antitrust Litig. - MDL No. 1869, 2013 WL 4038561, at *1-2. This practice, which was infrequent in the early-2000s, had become ubiquitous by the middle of the decade. In re Rail Freight Fuel Surcharge Antitrust Litig. - MDL No. 1869, 2013 WL 4038561, at *2. Troubled by the disconnect between the purported rationale for the surcharge, as a recovery mechanism for fuel costs, and the manner in which the surcharge was applied regardless of marginal fuel costs, the STB terminated the practice with respect to rail freight traffic within its regulatory authority. See id. at *2; Rail Fuel Surcharges, 2007 WL 201205, at *4. Following the STB's decision, purchasers of rate-unregulated rail freight began to sue the defendant railroads, alleging that those railroads had illegally conspired to impose supra-competitive rates through the uniform application of the rate-based fuel surcharge. In re Rail Freight Fuel Surcharge Antitrust Litig. - MDL No. 1869, 2013 WL 4038561, at *2.

On November 6, 2007, eighteen of those cases, pending in six districts, were consolidated and transferred to this Court by the Panel on Multidistrict Litigation. See In re Rail Freight Fuel Surcharge Antitrust Litig. , 587 F.Supp.2d 27, 29 (D.D.C. 2008). The consolidated cases involve common allegations that UP, along with the three other defendant railroads, engaged in price-fixing by conspiring to fix fuel surcharges on rail transportation in violation of Section 1 of the Sherman Act (15 U.S.C. § 1). See generally Second Consol. Am. Class Action Compl., Dkt. No. 324. Initially, only Jones Day and Covington & Burling LLP ("Covington") represented UP in the MDL.

While, as noted, Latham had represented Oxbow on various matters since 2004, on October 3, 2011, Latham solicited an engagement letter (the "Engagement Letter") from Oxbow Carbon & Minerals LLC for legal work performed in connection with the permitting of new and expanded facilities at the Port of Long Beach in California, and to cover representation on other ongoing and future matters. Engagement Letter, Wyman Decl. Ex. A at 1. The Engagement Letter contained an advance conflicts waiver. Id. at 4. Prior to executing the Engagement Letter, Oxbow's in-house counsel negotiated for the removal of the Engagement Letter's arbitration clause. Clark Decl. ¶ 11; Latham Opp. at 32. After Latham agreed to remove that clause, Oxbow signed the Engagement Letter on October 6, 2011. Clark Decl. ¶ 11.

On June 21, 2012, this Court certified a class of direct purchasers of rate-unregulated rail freight services. In re Rail Freight Fuel Surcharge Antitrust Litig., 287 F.R.D. 1, 10 (D.D.C. 2012). Oxbow and Latham agree that Oxbow falls within the definition of the plaintiff class certified by this Court, although Latham suggests that Oxbow opted out of that class for all practical purposes by filing its own separate lawsuit. See Oxbow Mot. at 5; Latham Opp. at 18-19. Technically, however, Oxbow did not have the opportunity to opt out of the class before the Court's certification was vacated, as the Court stayed class notice pending appeal of the class certification decision. See In re Rail Freight Fuel Surcharge Antitrust Litig. , 286 F.R.D. 88, 90 (D.D.C. 2012).

On or about July 2, 2012, UP contacted Latham about assisting UP with respect to its class certification appeal. Latham Opp. at 5-6; Ballenger Decl. ¶ 3. At that time, Latham "requested a conflicts check regarding the named plaintiffs and named defendants in the class action in Latham's conflicts system." Ballenger Decl. ¶ 3. Latham determined that there were no conflicts and began advising UP concerning the class certification appeal. Id.

Later in July 2012, UP requested that Latham become more deeply involved in UP's representation in the MDL. Ballenger Decl. ¶ 4. Before accepting this expanded representation, Latham performed a second conflicts check, on July 30, 2012. Id . Latham determined that there were no conflicts and began advising UP on broad issues of strategy in the MDL. Id . ¶¶ 3-4.

On July 31, 2012, Oxbow appeared directly in the MDL by filing a motion seeking access to sealed records ("Motion for Access"). Oxbow's Motion for Access to the Record, Dkt. No. 554. UP, represented by Jones Day and Covington, opposed the Motion for Access. Defendants' Opposition to Motions for Access, Dkt. No. 562. Latham represents that "it did not advise UP about Oxbow's motion seeking access to discovery, and it had nothing to do with UP's response to that motion." Ballenger Decl. ¶ 6. Oxbow does not allege that Latham advised or assisted UP in opposing Oxbow's Motion for Access.

In September 2012, UP asked Latham's Daniel Wall to become UP's lead trial counsel in the MDL, and he agreed. Wall Decl. ¶¶ 6-7; Ballenger Decl. ¶5. A few weeks later, UP asked Latham to defend UP in Oxbow's Related Case. Wall Decl. ¶ 8. Latham declined that representation, it says, because the firm "did not want to be adverse to a valued client." Latham Opp. at 6.

On October 4, 2012, Latham entered an appearance on UP's behalf in the MDL. Latham Opp. at 6; Latham's Notice of Appearance & Motions for Leave to Appear Pro Hac Vice, Dkt. Nos. 621-24. Prior to Latham's entering this appearance, Oxbow was unaware that Latham was working with UP concerning the MDL. Clark Decl. ¶ 13. Oxbow learned of Latham and UP's relationship by ECF notice. Id.

Within days, Oxbow contacted Latham and requested that Latham cease to represent UP in the MDL. Clark Decl. ¶ 15. Oxbow's senior management and General Counsel spoke directly with Latham's Global Chair and Managing Partner, Robert M. Dell, and insisted that Latham withdraw from its representation of UP. Id . When Latham refused to withdraw, Oxbow terminated its relationship with Latham. Id.[3] Then, between December 2012 and January 2013, Oxbow and Latham exchanged a series of letters in which Oxbow continued to insist that Latham withdraw; Latham continued to refuse. See id. Exs. E-G. Finally, being ...

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